Fill in the blank 1. Because depreciation expense and amortization expense both reduce net income, but are noncash events, they must be ______ back to net income to neutralize them.

2. In cash flow from operations, net income that includes the subtraction of depreciation expense is the starting point. Depreciation expense must be added back to net income to _________________ it because depreciation expense does not increase or decrease cash.

3. Working capital adjustments are Group of answer choices:

A. changes in current assets and liabilities that help explain temporary differences between net income (measured on an accrual basis) and cash flow from operations (measured on a cash basis).

B. changes in noncurrent assets and liabilities that help explain temporary differences between net income (measured on an accrual basis) and cash flow from operations (measured on a cash basis).

C. changes in current assets and liabilities that help explain temporary differences between net income (measured on an cash basis) and cash flow from operations (measured on an accrual basis).

4. Two categories of items explain the difference between net income and cash flow from operations: _________- [ Select ] ["noncash expenses", "cash expenses", "cash revenues", "noncash revenues"] and _____ [ Select ] ["working capital adjustments", "long-term debt adjustments", "equity adjustments"] .

5. Arguably, the two most important measures of financial performance are: [ Select ] ["net income", "total assets"] and [ Select ] ["cash flow from operations", "total liabilities"] .